SHLDQ - Sears Holdings Corp

[CorpRaider]

I know everyone on here has already had this thought but it seems likely this quarter will have been a god-awful blood bath, based on the reports from other retailers.  Also, the spike in MTG rates may have kicked appliance sales in the teeth over the short-term.

[Luke 532]

Not sure why he owns GAP with 10m more shares to go but hes made a lot of dough on this name.

 

How does Eddie figure out that after 10 years of completely under performance and stagnant growth that GAP was going to skyrocket soon after he decided to invest? That is what I would really love to know because he seems to have a knack for finding those types of situations. I like his stock picks, they've given me some good returns. Except for SHLD. Thats given me a migraine.

 

Perhaps this...

http://beta.fool.com/jonathanyates13/2012/09/17/eddie-lampert-sears/11676/

"In November 2006, The Chicago Sun Times reported that Sears Holding was interested in some or all of the following companies: Home Depot, Safeway, Gap, BJ's Wholesale Club, Radio Shack, Pep Boys, and Anheuser-Busch. That could explain his massive buy to elevate the stock price so it could be as a currency for a stock-based acquistion."

[Luke 532]

Berkowitz 13F is out.

Looks like he added over 800,000 more SHLD shares in Q2

Total shares at end of quarter 20,392,973

 

800K shares effectively removes another 0.75% of the entire share count from the float.  The longer this keeps up the more likely that a short squeeze could occur (assuming the shorts remain short).

[muscleman]

I apologize if this has already been posted and discussed, but I found this short presentation to be very helpful with regard to some of the issues that have been raised:

 

http://www.searsholdings.com/invest/docs/Sears_Re_February_2012.pdf

 

-t-bone1

 

What is confusing here is that KCD IP is owned by the sears and KMart retail subs. This means if these two subs go down, the liability holders may claim on the equity interest of KCD IP. Am I wrong here?

 

You are correct that the liability holders have a claim on the equity of KCD IP, but Sears Re has a lien on the assets, which must be paid off before the equity in KCD IP has any value . . .  So in effect, the assets (or at least the portion of them on which there is a lien) are bankruptcy remote.

 

Does the following mean that:

1. SHLD thinks the brands in total are worth at least 1.8 Bn?

2. The Sear Re holds lien to 125 full line stores.

 

Therefore, the other real estates in KCD IP may be acquired by liability holders other than Sears Re?

 

===============================================

Two securitization structures were used to develop asset-backed securities for Sears Re

−Real Estate Mortgage Investment Conduit (“REMIC”) Transaction – November 2003

125 Sears Full-line Stores were contributed to a bankruptcy-remote structure

Sears Re purchased $1.25 billion of mortgage-backed securities issued by the REMIC

−IP Transaction – May 2006

U.S. rights to the Kenmore, Craftsman and DieHard trademarks were contributed to a bankruptcy-remote entity – KCD IP, LLC

Sears Re purchased $1.8 billion of asset-backed securities issued by KCD IP, LLC

[constructive]

I apologize if this has already been posted and discussed, but I found this short presentation to be very helpful with regard to some of the issues that have been raised:

 

http://www.searsholdings.com/invest/docs/Sears_Re_February_2012.pdf

 

-t-bone1

 

What is confusing here is that KCD IP is owned by the sears and KMart retail subs. This means if these two subs go down, the liability holders may claim on the equity interest of KCD IP. Am I wrong here?

 

You are correct that the liability holders have a claim on the equity of KCD IP, but Sears Re has a lien on the assets, which must be paid off before the equity in KCD IP has any value . . .  So in effect, the assets (or at least the portion of them on which there is a lien) are bankruptcy remote.

 

Does the following mean that:

1. SHLD thinks the brands in total are worth at least 1.8 Bn?

2. The Sear Re holds lien to 125 full line stores.

 

Therefore, the other real estates in KCD IP may be acquired by liability holders other than Sears Re?

 

===============================================

Two securitization structures were used to develop asset-backed securities for Sears Re

−Real Estate Mortgage Investment Conduit (“REMIC”) Transaction – November 2003

125 Sears Full-line Stores were contributed to a bankruptcy-remote structure

Sears Re purchased $1.25 billion of mortgage-backed securities issued by the REMIC

−IP Transaction – May 2006

U.S. rights to the Kenmore, Craftsman and DieHard trademarks were contributed to a bankruptcy-remote entity – KCD IP, LLC

Sears Re purchased $1.8 billion of asset-backed securities issued by KCD IP, LLC

 

That real estate is part of the REMIC, not part of KCD LLP.

 

Yes, the financial statements indicate that KCD intangibles are worth more than $1.8B, based on capitalizing the royalty stream from Sears and Kmart to KCD.

 

At some point Sears Re may want to sell KCD debt or REMIC debt to a third party. But Sears very likely wants to keep equity control of those subsidiaries.

[constructive]

Yes, the financial statements indicate that KCD intangibles are worth more than $1.8B, based on capitalizing the royalty stream from Sears and Kmart to KCD.

 

In fact, they are worth enough not to have to take an impairment on the $2.8B balance sheet intangible number.

 

It's quite possible that they would be forced to take an impairment at some point if the KCD IP assets weren't separated and securitized. I think the current structure makes that less likely.

[muscleman]

I apologize if this has already been posted and discussed, but I found this short presentation to be very helpful with regard to some of the issues that have been raised:

 

http://www.searsholdings.com/invest/docs/Sears_Re_February_2012.pdf

 

-t-bone1

 

What is confusing here is that KCD IP is owned by the sears and KMart retail subs. This means if these two subs go down, the liability holders may claim on the equity interest of KCD IP. Am I wrong here?

 

You are correct that the liability holders have a claim on the equity of KCD IP, but Sears Re has a lien on the assets, which must be paid off before the equity in KCD IP has any value . . .  So in effect, the assets (or at least the portion of them on which there is a lien) are bankruptcy remote.

 

Does the following mean that:

1. SHLD thinks the brands in total are worth at least 1.8 Bn?

2. The Sear Re holds lien to 125 full line stores.

 

Therefore, the other real estates in KCD IP may be acquired by liability holders other than Sears Re?

 

===============================================

Two securitization structures were used to develop asset-backed securities for Sears Re

−Real Estate Mortgage Investment Conduit (“REMIC”) Transaction – November 2003

125 Sears Full-line Stores were contributed to a bankruptcy-remote structure

Sears Re purchased $1.25 billion of mortgage-backed securities issued by the REMIC

−IP Transaction – May 2006

U.S. rights to the Kenmore, Craftsman and DieHard trademarks were contributed to a bankruptcy-remote entity – KCD IP, LLC

Sears Re purchased $1.8 billion of asset-backed securities issued by KCD IP, LLC

 

That real estate is part of the REMIC, not part of KCD LLP.

 

Yes, the financial statements indicate that KCD intangibles are worth more than $1.8B, based on capitalizing the royalty stream from Sears and Kmart to KCD.

 

At some point Sears Re may want to sell KCD debt or REMIC debt to a third party. But Sears very likely wants to keep equity control of those subsidiaries.

 

I do know that REMIC has 125 full line stores. However, from previous discussions, my impression was that all of the other SHLD owned stores were under KCD IP. I am asking if those stores would get claimed by the liability holders.

 

On the other hand, in terms of SHLD vs BRK, I am curious if Sears Re would become a true insurance company just like BRK in the future.

[constructive]

I do know that REMIC has 125 full line stores. However, from previous discussions, my impression was that all of the other SHLD owned stores were under KCD IP. I am asking if those stores would get claimed by the liability holders.

 

I don't think KCD owns any real estate. I think all of the stores other than the 125 in the REMIC are held at the Sears and Kmart corporate level.

 

Correct me if I'm wrong.

[muscleman]

I do know that REMIC has 125 full line stores. However, from previous discussions, my impression was that all of the other SHLD owned stores were under KCD IP. I am asking if those stores would get claimed by the liability holders.

 

I don't think KCD owns any real estate. I think all of the stores other than the 125 in the REMIC are held at the Sears and Kmart corporate level.

 

Correct me if I'm wrong.

 

http://www.sec.gov/Archives/edgar/data/1310067/000119312507066067/d10k.htm

See page 46.

"The Company has transferred certain domestic real estate and intellectual property (i.e. trademarks) into separate wholly-owned, bankruptcy remote subsidiaries."

It is unclear to me whether this is KCD IP, or it means KCD IP + a few other.

 

It would be interesting to know which subs own the real estates in collection.

[Luke 532]

Berkowitz says this is all reminiscent of early Berkshire Hathaway if we play back the tape.

 

Earlier this year he said we are beginning to see the emergence of a new Berkshire Hathaway. Lampert sells autozone and buys more stock of sears. Lampert hires a president for his firm and moves to Florida and now for the first time stepping into the CEO job. I don't  know but this seems like a good time to watch every bit of news coming from sears

 

Blast from the past, well, January of this year.  Take texual's comments and factor in that Lampert's recent filing shows ESL went from, what, 9 investments down to 4 (and 2 of those 4 are shrinking)...  It seems pretty clear to me that he is intent on having SHLD be his sole investment.  He sold/cashed out all of his AutoZone, iStar, Genworth, Seagate, Netflix, Orchard.

 

I return to the argument I've made before.  Why would a guy that has returned 29% annualized returns for 25 years voluntarily wind down that kind of operation?  Assuming he doesn't want to quit the business and go collect seashells ("Don't Waste Your Life" by John Piper reference there), the reason would be that he thinks something better is waiting elsewhere. 

 

OK, so where?  If all his actions in recent years point towards a focus on 1 investment, on 1 company, is it logical to think that 1 company might be where he thinks he can exceed 29% annualized returns?  I would think so.  Lampert has been involved in SHLD for 10 years so he should know better than anyone on the planet whether or not the businesses within SHLD can return 29% annualized returns at some point in the future.  And do we really think Lampert expects to earn those kind of returns from retail at Sears as it was in the past?  Of course not, unless he has gone insane.  Permanent capital/investment vehicle, whatever we want to call it, is looking more and more likely to be his intent via SHLD and the businesses that it contains (REIT, ShopYourWay, KCD, Lands' End, auto biz, home service biz, etc.).

 

He could be wrong, of course, but there's literally less than a handful of people in the entire world that I'd rather be a business partner (via share ownership) with than Eddie Lampert.

 

My intent is not to get people excited or amped up about SHLD, my intent is just to point out and/or remind people of what seems to be taking place.  If that causes excitement and strong conviction then it might be warranted and not such a bad thing to discuss.

[texual]

I return to the argument I've made before.  Why would a guy that has returned 29% annualized returns for 25 years voluntarily wind down that kind of operation?

 

Who says he wants to keep being in the money running business? Who says he needs to make 29% going forward? What if the billionaire in him says enough is enough. What if hes OK with making 4-5% returns at SHLD as long as its his family's nest egg for all of eternity? I would stay away from this assumption because we have no clue what his personal desire is as far as running money, running Sears or whether he just wants to close down ESL, and eventually step down from the CEO job at Sears and leave it to someone else while he sips pina colada by the beachfront.

 

the businesses within SHLD can return 29% annualized returns at some point in the future.

 

Again, mission critical error. The company can NOT generate adequate returns and he is disappointed. He will not allow the company to lose in the long run but he may be in over his head. Also if this were the case he would not be taking such drastic measures to be both the chairman and CEO. It sounds like his company can only be saved by himself, nobody else wants to deal with this problem.

 

You've returned to the argument I used to make that his past record is not consistent with his present record at SHLD. It might be possible that the market is at a point where he may not be able to buy any stocks he finds valuable except Sears. What if the market peaked and we just go sideways for a while and his best ideas have all run out? The bank stocks he used to do well on have already made up so much ground. The tech firms he liked are most likely also hitting new highs. What do you think ESL will do, buy shares of Priceline.com for us and hope to god he can double the money every year until the company's retail operation is dwarfed by his investment arm/machine? Get real man, that may happen if both him and Berkowitz were like the new Charlie and Warren. But so far those are very speculative thoughts.

 

Ten years is a long time to wake up and smell the coffee if you consider that his hedge fund did pretty well with lots of stocks the past five years, while SHLD didn't get any of that benefit. What prevented him from buying some stocks with small dollar amounts within SHLD to just generate cash? People won't blow the doors down if they whiff him doing his job at SHLD: make money. Its because he simply avoided doing anything at Sears because he really has no clue what to do.

 

But your right, if he did become the portfolio manager at Sears Holdings I would be more or less buying hand over fist.

[Luke 532]

What if the billionaire in him says enough is enough. What if hes OK with making 4-5% returns at SHLD as long as its his family's nest egg for all of eternity?

 

Wouldn't the 2/20 structure of ESL (or whatever fee structure it has) and just doing what he has been doing be a lot easier path to earning 4%-5% on his money for eternity rather than take the risk of putting all his eggs in one basket and potentially losing everything (or a very large chunk of it) he has built up over the years?

[Luke 532]

Its because he simply avoided doing anything at Sears because he really has no clue what to do.

 

But your right, if he did become the portfolio manager at Sears Holdings I would be more or less buying hand over fist.

 

That first sentence is at odds with the second.  If he has no clue what to do why in the world would you buy hand over fist if he becomes more invested and more focused on SHLD?  An idiot doing the same thing on a larger scale would just make him more of an idiot, no?

[Vish_ram]

Something that caught my attention in SHLD's income statement was the steadily decreasing gross margin rate and increasing operating expenses as percentage of sales.

 

http://www.sec.gov/Archives/edgar/data/1310067/000131006713000013/shld201210k.htm

pg 24

 

Is SHLD experiencing diseconomies of scale?

A 2% worsening of SG&A & Gross margin combined reduces $1 billion of annual pretax income. Given the plethora of store closings & reductions in employee count in the last several years  one would expect these ratios to improve. But we are getting the opposite. There are certain expenses that are hard to reduce even if revenues go down (like IT hardware/software expenses). The closing of stores also entail costs.

 

I think SHLD reached a critical point from 2012 from profitability point of view (Gross margin % started going below SG&A exp as % of revenue). You are now burning cash. Look at the decline in operating cash flow for last 5 years

http://financials.morningstar.com/cash-flow/cf.html?t=SHLD&region=USA&culture=en-US

. The funny thing is, retail has been in recovery for last few years. SHLD never got this memo.

 

http://ycharts.com/indicators/retail_sales

 

Lampert states in his letter that RE holdings are undervalued. They have ample liquidity etc. Given the increasing cash burn from operations, constant cash burn from investments (tune of 1/2 billion $), the going starts getting tough. There are only two ways out:

 

1) Immediate liquidation - this has been ruled out, or is impossible to execute. If they can do it, SHLD may be worth double to triple the current price.

 

2) Show positive EBIDTA, increase total sales, SSS growth or arrest its decline ...Lampert's leadership in doing this is woefully inadequate. Let us see how Shop your way does. I wonder if asset sales, store closings will improve cost efficiency and gross margin rate. One magic scenario some investors are hoping for is that Lampert will close all badly performing stores and voila, the profitability would come. Note that some of the cash from store closings would go to maintain the cash burn in ops and maintenance capex. Like Phileas Fogg in "around the world in 80 days", you have to burn parts of ship to keep going. The Q is would it reach the port soon enough?

 

At the moment we can argue that whatever Lampert has done since taking over hasn't turned the ship around.

 

I'm not smart, but what is Berkowitz seeing in this?

 

[texual]

I mean to say at the present moment with all the facts we have right now, ESL does not have a clue what to do with Sears Holdings for the past ten years. He may have taken some steps to rectify issues, built the ShopYourWay rewards program, and bought back stock. But half of the things he has done right have not made his company productive or competitive with his peers. He should be trying to compete with Macy's and other brand retailers. Instead he did everything else. Whether it works is to be seen. But if it doesn't work we have a laundry list of things that Harvard Business School could do a yearlong seminar on: the ESL saga at SHLD.

 

And the second sentence is not in conflict with the first. I mean to say if he just admits that the turnaround of the retail assets isn't going to work out and he isn't going to invest more time and money into it, he had better just start investing as he usually does. If that happened I would be a buyer. Till then, ESL has not a clue. Ten years is enough time to decide whether you want to go forward with this or not. He should be more transparent and make a clear choice about how he wants to proceed.

 

If he shut down the fund I would become interested but not as interested as when he becomes the investment manager.

[ERICOPOLY]

Something that caught my attention in SHLD's income statement was the steadily decreasing gross margin rate and increasing operating expenses as percentage of sales.

 

The costs associated from closing down stores and severance are counted as operating expense.

 

Are you stripping out the costs from closing stores and severance when you are viewing operating expenses?

 

[texual]

I think he may have imagined a better economy would allow him to sail many years into twilight with Sears (while he also slowly fixed the operations as well as built a investment vehicle on the side).

 

Explains why he spent ~6 billion of company money so quickly on buybacks. Doing the buyback early on shows that he may have overestimated what the timeline would be. He knew in his gut that buying stock at 130, or whatever he was buying at was nothing, because the stock would be much higher soon enough.

 

I think ESL believed the stock would be well over 200, 300 a share and more. By now he would have expected a totally different situation. But that didn't happen so here we are. 6 billion in buybacks down the drain. He closed some stores stores, did some spinoffs, overpaid for Sears Canada shares from Ackman and now has to try to salvage that as well. He did a reorg (which now is getting slammed in the press).

 

I wish it were easier for ESL but he has become his own worst enemy. By keeping his mouth shut, by being mysterious and coy, even with shareholders, he is allowing the self fulfilling prophecy. He is becoming Crazy Eddie. But if he just started talking straight with everyone and went out of his way to help us understand better his thought process, we wouldn't be arguing over the bankruptcy remote and bondholder issues. He would have given us WEB's version of history which is very concise and articulate. ESL has obfuscated everything about this company to the detriment of everyone but himself.

 

Which is why people like me and fellow shareholders feel like he must know something or have a plan and if we don't latch on now, we will miss it. Well surprise surprise, I'm about five years past that point and I haven't missed anything!! I'm actually underwater, haha.

[compoundinglife]

Its because he simply avoided doing anything at Sears because he really has no clue what to do.

 

But your right, if he did become the portfolio manager at Sears Holdings I would be more or less buying hand over fist.

 

That first sentence is at odds with the second.  If he has no clue what to do why in the world would you buy hand over fist if he becomes more invested and more focused on SHLD?  An idiot doing the same thing on a larger scale would just make him more of an idiot, no?

 

"If I ever write a book its going to be called Why smart people do stupid things" - WEB

 

I have been long since late 2011 and just playing devil's advocate here. I think anyone who owns this stock has to accept that there is a strong possibility that ESL is in way over his head and does not really have a handle on the situation at Sears. If it all went to hell it would not be the first nor the last time a brilliant person continued to double down in a losing situation and failed.

 

I don't disagree with a lot of the pro SHLD observations on this thread. However sometimes things are just as they appear to be and there is no magic ace up anyones sleeve. Time will tell. I don't really think there is anything else that can be said that will make the future any clearer to us. 

[Luke 532]

I'm not smart, but what is Berkowitz seeing in this?

 

Based on his public statements... in short, he believes this is the next Berkshire Hathaway.  And he views the real estate, brands, and inventory as providing more than enough margin of safety.  If one is convinced of the margin of safety part of that equation, then the upside becomes very attractive.  I think that's more or less the bottom-line of his rationale for investing so heavily in SHLD. 

 

Berkowitz has also hinted (strongly) on more than one ocassion that the mutual fund business is not where he wants to be.  At least twice he has alluded to this (links below).  I don't completely buy the argument that he has still never talked to Lampert.  He said that in 2009 (I think?  Might be mistaken... please provide link if you have one) but has he said that since then?  It wouldn't help him and Lampert get more shares if they came out and said "we plan on being business partners using SHLD as our vehicle" - that would cause quite a buzz around SHLD and send the stock higher while they are both still accumulating (800K shares for Berkowitz just this past quarter, for example, as well as Lampert getting more concentrated in SHLD by selling out of the likes of AutoZone, iStar, Genworth, etc.).

 

OK, here are the two links...

 

University of Miami video:

“That is the secret sauce, permanent capital.  That is essential.  I think it’s the reason why Warren Buffett gave up his partnership and bought a beat-up textile mill.  I think it’s the reason why someone is all of a sudden investing a lot of money in Sears.  There are different ways to get permanent capital and that’s absolutely right.  You need it because when push comes to shove, people run.  It’s that momentum, fear/flight wiring, and people just can’t help themselves.  And it can go as fast as it comes so we could make, it would be difficult after what we just went through (redemptions drove fund from $20B to $7B) to make a long-term private investment knowing that long-term shareholders can turn on a dime… We have a few things we’re thinking about, it’s possible.”

 

Interview with Bloomberg's Erik Schatzker: http://www.bloomberg.com/video/berkowitz-says-investors-should-stay-the-course-xQ4cMqpsRcuLhgIWZVMIfQ.html

“A good question…Stay tuned…At this point, I can’t talk about it, but stay tuned…mutual funds are great vehicles.  They’re transparent.  They give investors daily liquidity–highly regulated.  But they’re also constraints that go along with that, in terms of how much you can own of, you know, one type of company, how much you can have in concentrated positions.  And it’s fine.  But it’s proven not to be the perfect vehicle for non-public companies or illiquid investments.”

 

[Luke 532]

I don't really think there is anything else that can be said that will make the future any clearer to us.

 

So true!  There are a lot of reasons to really like the prospects going forward.  There are a lot of reasons to like the margin of safety.  But there are also unknowns and concerns.  I'm obviously in the former camp mostly and we likely won't move the needle in our understanding by discussing this ad nauseam, but I still do find these discussions very interesting and worthwhile.

[Luke 532]

But if he just started talking straight with everyone and went out of his way to help us understand better his thought process, we wouldn't be arguing over the bankruptcy remote and bondholder issues. 

 

If he was straight with us (i.e. spelled-it-out) using words then the stock price wouldn't be as attractive as it is today.  I think his actions have spoken volumes.  He even said he's not going to be doing interviews and all that jazz, that he'll communicate via shareholder letters and conference calls, not the media.

 

June 2005 shareholder letter…

“Finally, my hope is that our 10-Qs, annual reports, proxy statements and press releases will provide a significant amount of valuable information to our owners, both to inform you of the results of the company as well as to help you evaluate our future possibilities.  These will be the primary way we communicate with shareholders.  We believe that management will optimize the company’s performance by an unwavering focus on managing the business, serving our customers, and working to constantly improve operations.  As a related operating principle, we believe that substantial amounts of time spent on investor relations activities such as roadshows and investor conferences distract and detract from accomplishing our fundamental objective of creating value for all our owners.  Of course, the proof is in the performance, but we believe having large shareholders overseeing a company can help focus management on running the business for the long term benefit of all shareholders.”

 

He would have given us WEB's version of history which is very concise and articulate. ESL has obfuscated everything about this company to the detriment of everyone but himself.

 

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/shld-sears/10/

This is what I recall from reading Snowball.

 

"In the early days of Berkshire Buffett used part of the cash he squeezed out of the textile business to repurchase shares.  Buffett first invested in Berkshire in 1962 and assumed control in 1965.  From 1962 to 1975 Berkshire reduced its shares outstanding from about 1.6 million to slightly under 1 million.  Many of the shares were repurchased from Buffett's previous partners.  Warren gave them enough information about the business, but just enough."

 

 

 

[Vish_ram]

Good point Eric, the numbers are all lumped in. This includes severance costs (-), impairments (-), gain on sales of assets (+). The net effect as % of revenue doesn't explain the drop.

 

I think that the store closings (sale of property or leases) will show up on Reductions in PPE (CF- investing). The net effect doesn't help get a free cash flow for last year). If I'm right about diseconomies of scale, then SHLD will get more cash flow issues. The question is, when will it reach the inflection point?

 

Luke 5:32: Thanks for the links.

 

Something that caught my attention in SHLD's income statement was the steadily decreasing gross margin rate and increasing operating expenses as percentage of sales.

 

The costs associated from closing down stores and severance are counted as operating expense.

 

Are you stripping out the costs from closing stores and severance when you are viewing operating expenses?

[compoundinglife]

I don't really think there is anything else that can be said that will make the future any clearer to us.

 

So true!  There are a lot of reasons to really like the prospects going forward.  There are a lot of reasons to like the margin of safety.  But there are also unknowns and concerns.  I'm obviously in the former camp mostly and we likely won't move the needle in our understanding by discussing this ad nauseam, but I still do find these discussions very interesting and worthwhile.

 

I agree the discussion is interesting and worthwhile. I was just trying to sum up in a few words the point (or one of the points) Textual was making.

 

Carry on! :)

[compoundinglife]

But if he just started talking straight with everyone and went out of his way to help us understand better his thought process, we wouldn't be arguing over the bankruptcy remote and bondholder issues. He would have given us WEB's version of history which is very concise and articulate. ESL has obfuscated everything about this company to the detriment of everyone but himself.

 

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/shld-sears/10/

This is what I recall from reading Snowball.

 

"In the early days of Berkshire Buffett used part of the cash he squeezed out of the textile business to repurchase shares.  Buffett first invested in Berkshire in 1962 and assumed control in 1965.  From 1962 to 1975 Berkshire reduced its shares outstanding from about 1.6 million to slightly under 1 million.  Many of the shares were repurchased from Buffett's previous partners.  Warren gave them enough information about the business, but just enough."

 

Buffett bought National Indemnity through BRK in 1967. That was three years after taking over. Even if it he did not make it obvious to shareholders what he was doing I am guessing it was more clear than the current situation with SHLD.

[texual]

Anyone also know how old WEB was when he first invested in Berkshire Hathaway? How old was he when he shut down his fund? And how old was he when he assumed CEO?

 

 

Not that I want to be picky on ESL anymore than I have. But the guy is like over 50 years old. I think Berkowitz is the same age, both born in 61/62. It seems they are going slowly with this whole thing, I just wonder how it compares with Buffett who has been CEO for well over 40 years. Can ESL be the next WEB at the age he is now running Sears himself, assuming he gives up the hedge fund?